California Said to Trim $30 Billion From High-Speed Rail Cost

March 31 (Bloomberg) -- The price of a high-speed passenger
rail system in California would drop by $30 billion, or almost a
third, under a revised plan to be released next week, according
to a person briefed on the proposal.

The project, to connect San Francisco to Los Angeles, would
cost $68.4 billion, down from the $98.5 billion estimated in
November, according to the person, who wasn’t authorized to
speak on the matter publicly. The California High-Speed Rail
Authority is scheduled to unveil the revised plan, first
reported by the Sacramento Bee, on April 2.

California is the only U.S. state working to lay tracks for
trains to run as fast as 220 miles an hour (354 kilometers an
hour) an hour, after Congress cut off 2012 funds for such
projects. In January, a state legislative review panel
recommended against selling debt to start the project.

The new plan calls for a main line running down the center
of the state from Merced, about 120 miles south of Sacramento,
the capital, to the San Fernando Valley, north of Los Angeles,
the person said. It would then connect to the population centers
of Los Angeles and San Francisco by upgrades made to existing
commuter and freight lines.

Governor Jerry Brown has defended the project, while
declining to identify potential funding sources. Gil Duran, a
spokesman for the governor, said he had no comment today.

The initial plan, which quickly became dubbed the “train
to nowhere,” had called for building the first phase in the
state’s Central Valley, where fewer people live, and didn’t
explain how the rest of the project would be financed.

Auditor Criticized

State Auditor Elaine Howle criticized the plan in January
as lacking specifics about how the state might come up with the
money. California has received commitments for $3.5 billion in
federal funds for the project. State officials have said they
plan to rely on a mix of government and private investment to
complete the line, including as much as $9.95 billion in bonds
approved by voters in 2008.

Brown will ask lawmakers in the next few weeks to approve
spending some of the bond money to start construction. State
Treasurer Bill Lockyer would then sell the bonds.

In January, the high-speed rail board’s chairman and chief
executive officer both announced they were stepping down amid
criticism of the plan’s route through sparsely populated areas
and the $98 billion price tag, twice what was projected when the
project was submitted to voters.